More

Wealth Gap Between White and Black Households Grows

WASHINGTON, DC - JULY 22: Treasury SecretaryÃTimothy GeithnerÃs signature can be seen on a new twenty dollar bill, at the Bureau of Engraving and Printing on July 21, 2011 in Washington, DC. The roots of The Bureau of Engraving and Printing can be traced back to 1862, when a single room was used in the basement of the main Treasury building before moving to its current location on 14th Street in 1864. The Washington printing facility has been responsible for printing all of the paper Federal Reserve notes up until 1991 when it shared the printing responsibilities with a new western facility that opened in Fort Worth, Texas. (Photo by Mark Wilson/Getty Images)

File photo of money. (Credit: Mark Wilson/Getty Images)

ATLANTA (WAOK)- There is an overwhelming wealth gap between U.S. Black and White families and it continues to grow.

The median wealth of White households is 20 times that of Black households, according to a Pew Research Center analysis of newly available government data from 2009. Roughly a third of Black households had zero or negative net worth, compared with 15% of white households.

These widely disproportionate wealth ratios are the largest since the government began publishing race-related data a quarter century ago.

Dr. Charlie Carter, Professor of Economics at Clark Atlanta University, attributes the large wealth gap to a number of factors. Among them he identifies the lessening value of homes, causing a decrease in overall asset value, as well as a historically lower income level for African Americans.

One Comment

What wealth? Black people never had any wealth, just the illusion of living paycheck to paycheck…Wealth is the ability of you not working for your money, but your money working for you…I see very few black people in this position, maybe Oprah Winfrey, Bob Johnson, Majic Johnson and Michael Jordan, but the vast majority of us are working poor…

I have to agree with Sara. African Americans have been under a “ponzi scheme umbrella for years. We have been duked in terms of equality. We never really had full equality inspite of certain laws in the US Constitution. We continue to be marginalized no matter which way we turn these days. How many more injustices will continue to be tolerated is the question??

Sharon we as black people already have the answers and the solution to the problems. I have never considered myself to be middle class, rather UPPER POOR! I have never allowed the smoke screen or illusion as Sarah pointed out in her post to move my eyes and mind away from what is real and tangible.

1. What is real is the fact that a small elite group controls ALL the wealth in this country.

2. Blacks as a whole continue to support institutions that do not support us
3. People with real wealth are not concerned about who has the bigger house or most expensive car- it is their mission to make sure all their kind have houses that are paid for and that it used properly to build more wealth for generations to come.

4. Wealthy non black people respect their heritage and try to preserve it.

5. Wealthy non black people will put their differences aside when it comes to making them all more money

6. Injustices will continue to follow us as blacks until we take the blinders off and take action. Reestablish trust of one another, start building healthy alliances with each other in business, and check our off behaviour practices when it comes to our spending and who we choose to spend with. It breaks my heart the state that we are in, but we must began to become the change we seek in the world- if not some of us will have nothing else to do but work the crops- we are moving backwards not forward.

Thanks for the reply Porsha. We have to stop being blind and start focusing on self preservation and move into a positive direction. Just as you have stated, we have been moving backwards for a while. We have to stress education and work toward specific goals that will move us as a race going forward. Health, education and welfare are very important. For our survival as an ethnic group we have to do the things that will help us to progress. Stagnation and complacancy has sabotaged our progress as well. Integration was ok but we do not have the capital to pass down because of what happened. I am not one to dwell on the negative much. I try to accentuate the positive. Once again thanks for the reply.

As Black folk, we have created a culture that embraces materialism, flamboyancy and excessism; none of which are good for our financial plot in life. I will be the first to admit there are structural inequalities that help to create and sustain the wealth gap in this country. However, Black folk do not do themselves any favors by leading the “hood” rich lifestyles that create the illusion of wealth by financing everything with credit.

Further, this whole notion of us working together is a dream. It has never happened and probably never will. The best we can hope for is a few like minded individuals to come together for the greater good and replicate this scenario over and over in different communities so that those who do not understand the science of finance will learn.

To the Black Falcon: It will take a lot of work to undo mindsets which have moved in the wrong direction. You are right when you say we may never as a whole come together collectively. There has to be some African Americans to step forward and initiate or be the change. There has to be some to say they are sick and tire of being in this perpetuating trainwreck. Tea party members want to take their country back. We need to get our race back on track. The train has derailed so many times.. I am going to be hopeful change may come.

Sharon and Black Falcon, there are some blacks that feel as though we should leave this country and move to Africa, when i ask the question WHY? What for? We cannot form healthy alliances here in America so what will be different in Africa. The same monopolies that we have allowed to take place here, black folk in Africa have allowed the same. I am beginning to agree with Black Falcon on most of the issues. Letr me share something with you how backwards we are moving, and how this mental cycle of distrust and dislike for one another will blind us to what is real and can ultimately help us move forward:

I cant remeber the post, but Black Falcon listed a step by step plan for creating wealth and personal growth. It is a system that i was forced to learn having worked for extremely rich ultra conservative under cover racists. I saw what they were doing and replicated it and applied it to my life to turn my finances completely around.

Now the Black Falcon shared with posters what i have known for decades and another poster tried to throw doubt in the mix about who the black falcon really is or who he thinks he or she to be. Never mind the fact that he/she posted a blueprint that wealthy whites have used for years to get ahead. This is the distrust off like behaviour that happens time and time again with us. This is the same mindset that keeps us from putting our money in black banks, this is the same mindset that keeps us from doing trade with each other to grow our communities, and our bank accounts. I like you Sharon- am hopeful but sometimes this sht makes a sister wanna HOLLER!

Good evening Porsha. I like your post and yes there are many things which “Make you wanna Holla “or “Make me wanna Scream”.. Well, that is in reference to Marvin Gaye’s song along with Janet and Michael( the Jackson’s) song. We can too follow the same blueprint for success. We can do better. So many of us act as if we do not have the will to improve their lives. Racism has always been around but many blacks did what they could to succeed even during the worst of times. What the heck happened since then? it is like what in the world???

Sharon i enjoy your post as well, i think what has happened is a brainwashing and a miseducation of the Negro. My past employement as a housekeeper and estate manager allowed me to witness the behaviours of very wealthy people. These people were not entertainers or atheletes, but were extremely wealthy real estate owners, commercial real estate owners, land owners, business owners, etc………

The one thing that stood out with all of them is the fact that theyre main goal behind EVERY move they made was to leave it to the next generation. The second thing i observed is that they had several insurance policies to leave for the next generation. The third thing i noticed is that they had a strong connection with politics, banking, and the stock market.

So i think what has happened to us as a whole is that we have chosen to give up. It is a big machine to go up against especially when you have been brainwashed to believe that you are powerless. What propelled me to take control was when one of my white bosses told me when i asked for a raise and to be taken off a 1099 tax form, ” No. I know you have been handed a bad deck of cards, but the best thing you can do for yourself is get a good life insurance policy.” Now this mans net worth was at the time 300 million, and i was making under 500 dollars a week having to pay my taxes at the end of every year as a single mother. So i looked at his remarks 2 ways. I was initially mad but then i started to do research and take control of my destiny and finances and began to save money like i was insane. I purchased a million dollar life insurance policy to leave for my child to build upon when i am gone, as well. From that day on, i made a conscience decision to be informed and ACT on that information. I also resigned but not before i tricked him into giving me a fat cash bonus. Then every job that i took i made sure i got yearly cash bonuses that were 10 percent of my gross, and i banked all that money as well with a black bank of course.

When you work in this type of setting and form personal realtionships with these people you learn quickly that is not a question of upper, middle, and lower class- its only who has money and the power, and who does not, and from what i saw and this is real Sharon…………They invented the game Monopoly and are playing the heck out of it ….and winning.

You are absolutely right. The only way Black folk are going to win at this financial game is to learn all we can about how the game is played. You would not expect a person who has never played or knew anything about basketball to win a game against Michael Jordan. The same applies for the financial game.
As you did, we must learn all we can from people who are succeeding (as it relates to wealth generating). Then we must apply what we learn to our own lives and then to our communities. Then and only then will the “Black Community” begin to truly prosper.

Thankyou Black Falcon, I feel as though i have 3 mentors on this board: You, Sarah. and Shakka. I would never profess to knowing everything, in fact i could brush up more on being informed on politics and whats going on across the globe….. but when you know better- you ought to want to do better.

My parents were blue collar working class people. They did not know anything about investing, and most were too afraid to take risks about something they knew nothing about so they bought standard savings bonds that yield very little long term, but in their minds they were safe. And most parents in my parents era only invested in life insurance policies that will only cover burials. This was all they knew because no one shared with them tools of creating wealth, and they never sought out that information as well. But in 2011, with all the information out there we must be proactive about creating generational wealth.

When my daughter got her first job at 16 while still in highschool, I sat her down and told her not to even think her paycheck was going to be used to go mall hopping and shopping, no mam! I opened her up a bank account at a black bank, then got her invested with a stock broker. She has stock in Johnson& Johnson, Apple, Nike, Union Pacific, Cisco, Oracle, IBM, Phillip Morris, and Morgan Stanley.
And to take it further i made her do a homework assignment that involved doing reaseach on every last one of those companies. Its not Berkshire Hathaway, but its a good sound investment start. And she is so proud of the fact that she will be earning money and will have a small fortune by the time she reaches 40.

With all the information out there we must get our heads out of the sand. We must get our childrens heads out of BET and get them into the black owned banks and take their little paychecks and go staight to a stock broker – while they are young. We must teach them finance and credit responsibility while they are young.

As a single mother WITHOUT a formal education, who worked as a maid for over 25 years- if I can do it- ANYONE CAN………. building generational wealth is the only way we as blacks will ever have any real power here in America or abroad.

P.S. Black Falcon do you have any names of political sites that i could go to to learn more about whats going on politically?

1. Save more money than you spend
2. Set a savings goal to start at trying to reach that $10,000 dollar mark, once you get there saving becomes all that much easier and make it your life long passion to triple that by the end of the year even if you have to work a part time job or start a side business- just do it!
3. Once you reach that $30,000 dollar mark, go to a reliable brokerage firm and invest at least 10,000 of that into the stock market, and do not try to get the money back out. And keep on saving. The more you see in the bank the less you will want to spend on petty things. Cut up all bank cards associated with that savings account- period! Use a checking to pay bills, etc……only, but keep out that savings account it is only used as a wealth building account because you really want to diversify when you get invested- think long term gain.

4. Invest in several good life insuarnce policies, i prefer term but i also have whole and use well established insurance companies. This helps the next generation to be all that much more wealthier when you are long gone, and most plans are affordable, just tweak spending on things of no value and put that money into these policies first!

5. Get a living will, now!

6. If you own a home use it build more wealth

7. If you have children teach them about investing now while they are young and get them invested especially if they are working teens. Make them put their money and paychecks (even if they are small) into the stock market and a savings account that draws high interest. Show them the numbers that they will have earned by the time they are grown adults- this helped motivated my teenage daughter to save, invest, and not spend her money on junk or things of no value.

8. Subsrcibe to the Wall Street Journal, Black Enterprise, and other informative and insightful wealth building publications. I have gotten a ton of good info from Black Enterpise, alone.

9. Dont live beyond your means, live like you are poor and save like you are rich.

10. Teach and share. Our children know nothing about the value of money and the importance of saving and spending responsibly. Millions of dollars are spent yearly targeting blacks too spend spend spend, but never save save save- we must reverse this backwards way of thinking to move forward.

11. Start a business, any business and get your children involved in every aspect of that business- whether it be grass cutting, MLM, manufacturing, etc….or Avon, just do it. Everyone has a God given talent to be something great, just find your calling and run with it and build an enterprise or empire to pass on to your children and their children.

Like i said i do not profess to know everything, but this is what i did to pull my way up out the trenches of living pay check to paycheck. I am still growing because there is always something new to explore. I wish you much success, my brother!

Hi everyone. These are some great and insightful posts. I am so glad we have others like Derrick Boazman, Lorraine Jacques-White, Bev Smith, Warren Ballentine, Dr. Claude Anderson, etc. They are good sources to educate the minds of African Americans in reference to linking us to survival tactics in this rough economy and in dealing with global capitalism.

In addition to what Porsha has stated: Other sources of business/financial news are The Bloomberg Report, Business Week and CNBC. What people need to be wary of are these trillions in budget cuts which are to be around for a decade. Many will feel an impact like they have never seen. Also, less jobs have been created inspite of extending the W. Bush tax cuts. The United States can still lose their AAA credit rating. This stuff is unprecedented to knock a huge dent in the pocket and will also further reduce spending power in terms of a weak curreny which is the American dollar. Whew!!

Hey Sharon, thanks for the other info! I think everyone should go out and get this August month issue of Ebony, entitled the “Wealth” Issue. There is an article that is addressing these economic hard times and why it is so important to start NOW in these hard economic times , investing and being deliberate about saving and putting a financial plan in action!

Hello Family: Glad to see all the informative information being put out to help us a as people come out of this slump we’ve been in…I did the same thing with my sons as you have done Porsha with your daughter, my eldest was able to buy his first home @27 and is looking at getting him some investment rental properties…Dr Claude Anderson’s book Powernonics should be a must have in every black household..You should be able to get a copy@ Shrine of the Black Madonna or any black book stores around town…This bro has been trying for over thirty years to tell black people we would be where we are today and for us to be prepared and stop trying to help everybody but our own people…Notice the other communities don’t need us except when they are being treated as the new blacks (Hispanics, Arabs, East Indians, etc), then they need us to be on the frontline to take the bullets for them, but afterwards, they have no need for us, except as customers or consumers when everything is going well for them…We had better learn to recognize who our enemies are and to stop fighting among ourselves…

Sarah, that is awesome about your sons!!!! I will go and get that book.

Black Falcon and Sarah, I was blasted one morning when I called in and said that I as a black person would look foolish supporting any other etnic group other than my own. I got a lot of hate from black callers and the guest panelist. But its ok because no one will ever change my mind on that issue. Its each group for themselves and I am all the way PRO black. All blacks thought that these groups were our friends when they began to invade our communities with stores that catered to our interests. Then came the high standing blocks and security devices when you walk into their stores with a no money back policy on their cheap goods.

Black Falcon, i think in one of your post you stated that you were a psychologist? If so can you give some black folk some old fashioned shock therapy to rid us of this Willie Lynch psychosis of the brain that a lot of us are suffering from LOL!

Hi Porsha, You are funny. Shock therapy is what is needed to rid the psychosis for many of them. Many black people still think in terms of lower expectations. When you bring up how to help them and improve themselves, they will either ignore or just continue to think some how somebody will rescue them. I just do not know what to think many times. Sometimes I just will sigh.. Their psyches need to be reprogrammed or zapped. LOL. I know the stock market just dropped down some points after President Obama signed that debt ceiling increase bill.. Yet those cuts are still ready to go sometime this year and the picture will not be a pretty sight.